Restaurateur Makes Playboy Clubs Cook

Profits Grow Under Chicagoan

November 29, 1985|By Patricia Tennison, Chicago Tribune.

NEW YORK — When Chicago restaurateur Richard Melman was tapped to overhaul Playboy Enterprises Inc.`s foundering clubs, the first thing he did was march into the back offices in New York, Los Angeles and Chicago and order employees to clean their desks.

``That`s right,`` said the 43-year-old entrepreneur, laughing. Melman`s Lettuce Entertain You Enterprises Inc. has 23 restaurants and related companies in Chicago. ``They were probably asking themselves if this is what they hired Melman to do.``

But a year and a half later the ledgers showed what Melman was doing.

As Melman entered the picture, the Playboy Clubs Division had a pretax operating loss of $2.9 million in the fiscal year ended June 30, 1984. In 1985, it had a $768,000 operating profit.

``And now, we`re going to start to get aggressive,`` said Melman as the revamped Playboy Empire Club opened this month in New York City.

The plan is to polish the package in New York, then repeat it in 1986 in Los Angeles and in 1987 in Chicago, where the clubs are company owned.

The $100-a-year keyholders will see some major differences.

First are the ``rabbits,`` male Playboy bunnies in hare-revealing shirts or modest sports outfits. The decidedly female bunnies still are there but they`ve gone camp, dressed in costumes such as a ``chef`` bunny and ``Carmen Miranda`` bunny.

Not surprisingly, food is more visual role in Playboy`s Empire Club, in midtown Manhattan, where sushi, pasta, cracker-thin crusted pizzas, Cajun gumbo and frozen Snickers bars are exhibited buffet-style. And, whereas most major clubs, such as the Palladium in New York, thump to recorded music, Playboy is switching to a 10-piece orchestra with vocalists.

The influence of Hugh Hefner, Playboy chairman, majority owner and founder, is evident. His silk robe languishes behind glass like a museum piece in the New York club`s public bar; tame-looking covers of 1950s Playboy magazines line a back wall; and new, cool black marble walls are teamed with sensuous black or red velvet seats.

But the club smacks of Melman as well.

The brass and mahagony-stained wood seems to have been polished for decades, an aging trick he has used in his Chicago restaurants. A whimsical, red-carpeted stairway leads nowhere.

``It`s kind of 1938, (Melman`s) favorite year,`` said John Wise, manager of the New York club whom Melman tapped the Chicago-based Lettuce Entertain You. ``It was a very positive year.``

Special attention is given to the women`s room, symbolic perhaps of the expanded audience that Melman wants to attract to Playboy. Stalls offer six rolls of toilet paper, each dedicated to a male chauvinist, such as tennis player Bobby Riggs.

``The women can choose whichever male they want and, uh, do as they want,`` Wise said.

But there`s more to the package than new costumes, sushi and clever toilets. The financial makeover began two years ago with the order to literally clean desks.

``I wanted people to make decisions,`` Melman said. ``If they needed help, I`d help them. We threw out tons of stuff.

``It was symbolic of cleaning up and starting over. It also gave me insight into who would be easy to work with,`` he said. Because of what he saw, Melman replaced 23 of the 24 management people in New York, Los Angeles and Chicago. His Lettuce Entertainment You staff hired and trained the newcomers.

``We needed restaurant people who had experience running restaurants. If you want to run a train, you need an engineer. You don`t need to be brilliant to run a restaurant, but you need experience,`` he said.

With his handpicked people in place, he began to pare food costs.

``It`s the same system we use at Lettuce Entertain You,`` Melman said.

Within three months, food costs at the Chicago and Los Angeles clubs dropped from 45 percent of the operating budget to 35 percent. At Lettuce Entertain You, food costs are 30 to 40 percent, Melman said.

Employees are given specific responsibilities, then held accountable, Wise said. ``Everyone has one little area, and (Melman) expects it to be done perfectly.``

``My philosophy is based on people being successful,`` Melman said.

``When someone does something well, it builds confidence. For example, in the case of the bars, I`ll let someone be in charge of one bar. If they do that well, then they get two bars, then three or four.``

Bunnies traditionally had a four-week training session before serving. Melman maintains the four-week session but expands the training.